Get a quick and easy estimate of how much lifetime retirement income members will get from contributions to DBplus.
The ability to provide employees with a secure lifetime pension, with the certainty of a fixed cost for both employees and employers is unrivaled.
On average, contributions to DBplus go twice as far in retirement compared to group RRSP and defined contribution (DC) plans. Furthermore, DBplus provides valuable features such as inflation protection, survivor benefits, and early retirement options.
More retirement income for each dollar contributed
Considerable research has shown how large, multi-employer pension plans like CAAT can provide twice as much income in retirement compared to large group RRSP and defined contribution plans, for the same cost. The 2018 study The Value of a Good Pension, published by the Healthcare of Ontario Pension Plan, showed that Canada-model pension plans such as CAAT provide, on average, $5.32 in retirement income for each $1 in contributions, compared to large group RRSP and defined contribution plans, providing (on average) $2.58 for each $1 contributed.
Valuable employee benefit
Secure lifetime income in retirement, and other defined benefit pension features, are highly valued by employees – serving as a strong attraction and retention tool.
Defined benefit pensions with early retirement features can support workforce changes and minimize delayed retirements by employees unable to retire with confidence during an investment market down cycle.
Employers benefit from simplicity and cost predictability, similar to a DC plan, but with the unparalleled benefits of a DB plan for their employees. Investments, administration, governance and member communications are all managed by the team of dedicated pension experts at CAAT, saving employers time and reducing costs compared to operating their own pension plan.
Employees are spared from making investment decisions and, like employers, can focus on their core competence.
Employees enjoy the security of retirement income that is paid monthly for life. Together, employers and employees benefit from the sustainability and efficiency of a multi-employer jointly sponsored pension plan. The CAAT Pension Plan is 120% funded on a going-concern basis, with a funding reserve of $2.6 billion, based on its latest actuarial valuation as at January 1, 2019.
All parties are seeking a better solution
Research shows that Canadians want, and are willing to, contribute in order to achieve a secure, predictable, lifetime retirement income. Likewise, employees, unions and employers are increasingly looking for better and more secure pension options that have the best features of defined benefit pensions without the costs and risks of traditional, single-employer plans.
Secure pension income has broader social impact
Unfortunately, many employers have stopped offering DB plans, inherently passing on retirement investment risks and fees to their employees (and by extension, governments and taxpayers). This sub-optimal outcome leads to substantially lower retirement income per contribution dollar, which can impact employee stress and health, and the demand for social programs in retirement.
Employer costs are limited to their contributions, at the rate they select between 5% and 9% of employee earnings. There is no balance sheet risk or contribution volatility. Employees have the assurance of knowing their pension will be there for them in retirement, with a plan that isn’t reliant on the financial health of any one employer.
De-risking that benefits employers and employees
When organizations join DBplus, they remove the costs and risks associated with managing and governing their own pension plan. For employees, their promised benefits are protected, as they are not dependent on the financial health of their employer. Furthermore, for organizations in Ontario, the requirement to pay Pension Benefit Guaranteed Fund premiums does not apply.
Lower stress for employees
Members with secure defined benefit pensions don’t spend time worrying about how much pension they’ll have or about bearing the risk of their investment decisions.
The CAAT Pension Plan is independent, jointly governed, and fully funded. Our focus on benefit security ensures a strong and sustainable plan for all members. Our success is built on leading expertise, rigorous risk management, and strong governance. Read more in About CAAT
CAAT’s leadership team is well-experienced in managing the transition and consolidation of existing workplace defined benefit pension plans, in addition to integrating new employers with a defined contribution plan or Group RRSP, and those with no current arrangement.
Overwhelming endorsement from new members
All of our new participating employers have received overwhelming employee and union endorsement to join DBplus.
What does it cost?
Organizations select a contribution rate between 5% and 9% of employee earnings and at least match it. There are no other costs. Read more